SHV Energy and UGI to Launch Joint Venture to Accelerate the Transition of the LPG Industry to a Sustainable Future
18 May 2021 - 11:00AM
Business Wire
SHV Energy and UGI International, a subsidiary of UGI
Corporation (NYSE: UGI), leading distributors of off-grid energy,
announce the intention to launch a joint venture to advance the
production and use of Renewable Dimethyl Ether (“rDME”), a
low-carbon sustainable liquid gas, to accelerate renewable
solutions for the LPG industry. By leveraging the expertise,
innovation capabilities and distribution power of both companies,
the joint venture will aim to develop the full potential of rDME as
a sustainable solution.
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The parties anticipate the development of up to 6 production
plants within the next 5 years, targeting a total production
capacity of 300 kilotons of rDME per year by 2027. The aggregate
investment is estimated to be up to $1 billion which is expected to
involve third party investment.
The joint venture, in which both parties would have an equal
stake, will bring scale and critical mass to the rDME market by
developing opportunities for investment in production capacity.
Moreover, it will promote the use of rDME by driving efforts geared
at broad market acceptance, developing new rDME based technologies
to gain traction among users, and supporting the development of
infrastructure, regulations and standards for the safe use of rDME
in the off-grid energy sector. The joint venture aspires to advance
the further de-fossilization of the entire LPG industry by making
available approximately 20% of the rDME production to peers in the
LPG industry.
rDME is a complementary liquid gas that can be produced from
multiple renewable feedstocks. Being a safe, cost-effective and
clean-burning fuel, rDME is a viable sustainable addition to the
energy mix. It has a low greenhouse gas (“GHG”) footprint, reducing
emissions by up to 85% compared to fossil fuel alternatives. In
both pure and blended form, rDME can help the de-fossilization of
LPG by becoming a sustainable alternative for off-grid energy uses
including heating, cooking and transport. It is highly compatible
with existing infrastructure and equipment. Therefore, with limited
incremental investments, rDME can help to quickly transition the
LPG industry to a more sustainable future.
“De-fossilization is pivotal for our industry. Liquid gas is an
important, clean and efficient energy source used in over 1000
different applications by millions of people around the world.
Finding accessible, sustainable and affordable feedstock to produce
alternative liquid renewable gas is a high priority for the LPG
industry. We are convinced that rDME ticks all the boxes to be a
gamechanger for our industry. We are excited to join forces with
UGI to guide the LPG industry in this important transition,”
comments Bram Gräber, Chief Executive Officer at SHV Energy. “We
are ready to take up the responsibility to bring rDME to fruition,
which will be to the benefit of the whole industry and its
customers.”
Roger Perreault, Executive Vice President Global LPG of UGI
Corporation, who will become UGI’s CEO next month, continues: “The
proposed joint venture leverages our expertise in off-grid energy
and renewable fuels. Innovation is at the heart of both our
organizations, and by teaming up we will combine our strong
innovative capabilities. As leading distributors of LPG, we jointly
provide an even more extensive global distribution network through
which to promote the use of rDME. Although US and EU regulations
differ, we are convinced rDME will help LPG down the path of
de-fossilization across jurisdictions. We are excited to announce
this joint venture proposal and be able to contribute to a more
sustainable future for our industry and customers.”
More background on rDME
rDME is a safe, clean-burning, sustainable fuel that can support
de-fossilization of transport, domestic and industrial heating and
cooking. It is a single molecule, chemically similar to propane and
butane, produced from multiple renewable feedstocks including waste
streams and residues. rDME has a low GHG footprint, up to 85% GHG
emission reduction compared to alternatives, and can be easily
transported as a liquid in pressurized cylinders and tanks. It can
be used in pure form or easily blended with both LPG and bioLPG.
When blended with propane, rDME enables propane to approach carbon
neutrality.
About UGI International
UGI International, a subsidiary of UGI Corporation, is one of
the leading LPG distributors and operates in 17 European countries
servicing a customer base of approximately 615,000 end-users. UGI
International markets under several brands such as AmeriGas,
Antargaz, AvantiGas, DVEP Energie, Flaga, Kosan Gas and UniverGas.
In 2020 UGI International serviced customers across broad markets –
such as commercial and industrial, residential, agriculture,
Autogas and aerosol, retailing 1.7 million tons of LPG.
About UGI Corporation
UGI Corporation is a distributor and marketer of energy products
and services. Through subsidiaries, UGI operates natural gas and
electric utilities in Pennsylvania, distributes LPG both in the US
(through AmeriGas) and internationally (through UGI International),
manages midstream energy assets in Pennsylvania, Ohio and West
Virginia and electric generation assets in Pennsylvania, and
engages in energy marketing, including renewable natural gas, in
twelve states and the District of Columbia and internationally in
France, Belgium, the Netherlands and the UK.
Comprehensive information about UGI Corporation is available at
https://www.ugicorp.com.
About SHV Energy
SHV Energy is a leading global distributor of off-grid energy
such as LPG and LNG and is active in the area of sustainable fuels
and renewable energy solutions. SHV Energy is a wholly owned
subsidiary of SHV, a family-owned multinational, and consists of a
group of specialized energy companies. The company’s brands include
Calor, Ipragaz, Liquigas, Pinnacle, Primagas, Primagaz and
Supergasbras. With these companies, SHV Energy’s mission is to
provide decentralized, low-carbon and clean energy solutions to 30
million business and residential customers who are not on the
energy grid.
More information about SHV Energy is available at
https://www.shvenergy.com.
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